Sell stocks to payoff SL debt?

**JustBill** · 01-29-2012, 04:47 PM

Me, I'd initiate the sell order prior to writing this reply. You've experienced a very nice run-up on the subject equity. Count your blessings, sell the stock, kill the SL. Good job.

**bjl584** · 01-30-2012, 05:32 AM

Originally posted by cztech View Post

We have $25K in SL debt. This takes $250/mo. out of our monthly budget (which includes a $190K mortgage). Would love to rid ourselves of the SL. Should I liquidate $30K of equities (keeping $5K for cap gains) and payoff this $25K SL? I have a 380% return on the equities I would liquidate, so it seems like the time might be right to get rid of this SL! Is there a general rule to follow here?

Great info here, thanks for the board!

CZ

If I were in your shoes, I would sell only if I were struggling financially. Your investments will compound over the years (assuming that they are invested properly.) You could run into an issue longterm and not have enough to retire at the desired age if you cash out your investments now. This all depends on other investments that you might have, your age, and your income.

**Cassius King** · 01-30-2012, 05:45 AM

I would sell. If you have a stock portfolio that is up 380%, then those are some volatile suckers. Meaning they could go back down as quickly as they went up. I'd sell the stock, count your blessings and thank them for paying off your student loan.

**disneysteve** · 01-30-2012, 05:50 AM

Originally posted by cztech View Post

I have a 380% return on the equities

Over what period of time? Is that a one-year return? A 5-year return? A 10-year return?

**YLTL_Dan** · 01-30-2012, 09:50 AM

Do you have a healthy emergency fund (3-6 months expenses)?

If so, I'd sell the stocks and knock out the student loan. If not, I'd fund the emergency fund and use the rest to pay off the debt. Use your monthly savings from not paying a student loan to build your investments back up. Great job!

**cztech** · 01-30-2012, 06:15 PM

Thanks for the replies!

I am really leaning towards selling. My wife has a 401K; I am self-employed and have a SEP that I fund for retirement. I am 38 years old. SL debt seems like it will never go away, I hate debt and just want to get rid of it! So the portfolio I would liquidate has the 385% return (as of today) after 7 years. I am content to move on. The 2 stocks are high fliers and I actually hold portions of them in my SEP retirement account. This equities account is just something that has done extremely well in the past 7 years.

Emergency fund is basically $3000 which unfortunately is only about good for 1 month of expenses ($1200 mortgage, $1200/mo daycare). I am actively adding to the emergency fund each month, however and that $3000 figure will keep growing no matter what I do w/ the sale of stocks/payoff of SL. I just think having SL off the books will make me feel good and will really free up a lot of $$. No CC debt. Just the mortgage after SL is gone.

**Mr Tipps** · 02-03-2012, 02:13 PM

Thats a pretty good return. Probably a good time to get out then - Well done

Sell stocks to payoff SL debt?